Economist, and member of the Finance Committee in Parliament, Dr. Anthony Akoto Osei has defended the legislature’s decision to cap the Bank of Ghana (BoG) financing of government budget at 5 percent.
His defense follows a press statement issued by the IMF over the weekend expressing dissatisfaction at some legislations passed by the House recently.
As part of the IMF conditions, government was expected to eliminate central bank’s financing from 10 percent to zero, while it removes government’s representatives on the Monetary Policy Committee of the BoG.
Parliament, however kept the BoG’s ability to finance the government budget at 5 percent, while government’s representatives on the Monetary Policy Committee of the BoG was scrapped.
But speaking to Citi Business News, Dr. Anthony Akoto Osei maintained that even though the IMF can compel the Executive under its agreement, parliament cannot be forced to rubber stamp every government decision, hence parliament’s rejected some of the requirements.
“Parliament is a sovereign body and parliament thought that for the nation Ghana, that was not the best option so parliament kept to that side. If they [IMF] had an agreement with government that parliament did not like, parliament has the right to reject it,” he said.
He maintained that the executive arm of government cannot dictate to parliament since the house is expected to serve as check on government expenditure.
Citing the rigorous procedure that the bill went through in parliament, Dr. Akoto Osei stated that members considered the practicality of the proposals and its effect on the economy before maintaining the central bank’s financing of government budget at 5 percent.
“The executive can go and enter into any form of agreement but for it to binding the peoples’ representative must approve it. If parliament disagree with the executive, that will be it. The executive cannot force parliament to do things in a certain way just because it has bonded itself in an agreement with the IMF,” he said.
He stressed that under no circumstances should the nation Ghana be compelled to take decisions that are contrary to the views of the people.
Reacting to a possibility of government coming back to parliament to amend the law, Dr. Akoto Osei stated that the move will be counterproductive and slap in the face of the executive.
“As far as am concerned, parliament has done it work and it is up to the executive to explain why parliament took that decision to the IMF. They must respect the parliament of Ghana,” he said.
IMF expresses dissatisfaction
A team from the International Monetary Fund (IMF), led by Joël Toujas-Bernaté, on a third review of Ghana’s programme with the IMF questioned some legislations passed by parliament recently.
Acoording to the team, “outstanding questions remain with regards to certain elements of the legislations recently passed by Parliament and discussions will continue”.
Parliament recently passed the Bank of Ghana Amendment Bill which was critical to the IMF conditions in granting the central bank power, as well as eliminate government’s budget financing by the BoG to zero percent.
The release, which was copied to Citi Business News stated that the team visited Accra from August 29 to September 2, 2016 to continue discussions on the third review of Ghana’s financial and economic program supported by the IMF’s Extended Credit Facility (ECF)
It stated that the team had constructive discussions with the authorities during the week on a few outstanding issues.
“The discussions focused mainly on updating the macroeconomic projections, firming up the fiscal outlook for 2016, and ascertaining that financial pressures faced by the main State Owned Enterprises (SOEs) in the energy sector will not pose additional risks to the central government budget,” it said.
The mission met with President John Dramani Mahama; Finance Minister Seth Terkper; Bank of Ghana Governor Dr. Abdul-Nashiri Issahaku; and other senior officials.
By: Lawrence Segbefia/citibusinessnews.com/Ghana